The modern retail sector has been identified as an important catalyst for accelerated economic recovery.
This is against the background of new fiscal policies introduced by the government to help shore up its revenues and boost the national economy.
Commenting on the development, Ade Sun-Basorun, chief executive officer, FoodCo Nigeria Limited, a leading retailer in south-west Nigeria, stated that it was pertinent to grow the modern retail sector as this would yield significant contributions to the Gross Domestic Product (GDP) and also act as a feeder industry to stimulate growth across other sectors.
Sun-Basorun in a statement said: “Sectors like manufacturing and agriculture typically feed off modern retail to power their aspirations of meeting the consumption needs of Nigeria’s over 200 million population. Modern retail plays a key role in unlocking critical routes to market for industries, especially within the SME and cottage enterprise segments, which in turn will boost local commercial activity and generate income for communities as well as revenue for the government.”
He further noted that investing in modern retail will trigger corresponding growth in the real estate sector given the increasing return to in-store shopping post-COVID-19.
According to Sun-Basorun, “While e-commerce has become a reality, the demand for in-store shopping, especially among quality-driven customers who prefer to physically assess items before they buy, has not diminished.
“The 2023 Broll Property Report expects that items under the Food and Beverage, Mobile Phones and Accessories, Health and Fashion as well as furniture categories will remain key drivers that will sustain the demand for real estate for modern retail. There is also the added consideration that the in-store shopping experience has become a socializing activity for many people.”
Sun-Basorun further stressed that an expansion of the modern retail sector would not only accelerate structural transformation within the sector but would also stimulate job opportunities in complementary industries.
“As modern retail continues to scale and interact with other sectors of the economy, it will trigger technical and high-level or highly skilled job opportunities within the space. 2021 COVID-19 in Nigeria: Frontline Data and Pathways for Policy Report, estimated that there was a 9 percent increase in the working population involved in retail and trade.
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“While this was an improvement from the 17 percent the year before, the report added that the spike did not reflect an acceleration of structural transformation.
“This indicates that the majority of the jobs in retail are still low-level employment. Modern retail has the capacity to reverse that trend. Additionally, as the sector grows, it will make more demands on complementary industries like construction, general services, security and power which would also translate to jobs for the industries.”
Acknowledging that the sector was going through a tough period due to the economic challenges, he expressed optimism that the sector’s resilience would see it through the difficult cycle.
“The general economic situation is also affecting modern retail as is to be expected. But as a 42-year-old player, we have been through thick and thin in the sector and still, we have always maintained our focus which is to deliver top customer service at competitive prices. We remain optimistic about the fortunes of modern retail moving into the future and we will continue to invest in it through good and difficult times,” he added.
Established in 1982, FoodCo is a diversified consumer goods company with interests in retail, quick service restaurants, manufacturing and entertainment.
The company operates the largest supermarket chain brand in South-west Nigeria, outside Lagos and is a Top 5 retailer in the country. FoodCo is also listed in the Financial Times’ list of Africa’s Fastest Growing Companies for the consecutive years 2022 and 2023.
